Japanese integrated steelmakers are contemplating struggling to win an increased price level of USD 600 per tonne FOB in the CR sheet exports they negotiate to Asian destinations for shipments in the July to September 2009 quarter.
They are set to start their negotiations shortly on Asian deals of CR sheet exports for July to September 2009 shipments. At present, they are in the final stages of their studies on offer prices, offers that will lead to an increased price level of USD 600 per tonne FOB in firm deals for Q3 shipments.
It is considered possible for the Japanese steelmakers to negotiate CR sheet exports to China even at a price level of USD 580 per tonne FOB, given a domestic price increase for CR sheets by China's Wuhan Iron & Steel Group Corporation. WISCO has told domestic customers that the company intends to raise the CR sheet price by CNY 360 per tonne for July shipments.
As a result, WISCO's new asking price of CR sheets translates into a level of USD 630 per tonne before tax. By comparison, what Baosteel Co Limited charges for June shipments of CR sheets translates into a level of USD 560 per tonne before tax. As a result, some market sources expect Baosteel to react with a larger price increase of CR sheets for July shipments, compared with WISCO's CNY 360.
Prices below USD 500 per tonne FOB still exist in part of Japanese CR sheet exports to Asian destinations. Accordingly, the Japanese steelmakers are expected to offer a price increase of USD 100 per tonne across the board in the CR sheet exports they negotiate for Q3 shipments if they aim to eliminate prices below USD 500 per tonne FOB.